Mobile News

The term “permission marketing” refers to a permission-based trend in marketing strategy. It causes marketers to take a more segmented and personalised approach to their communications with customers. It is based on the principle that permission should be the driving element of marketing communication. Mobile interaction management is an extension of this trend to the mobile medium.

This trend originally grew out of the new marketing and technology possibilities created by the Internet. The rapid development and deployment of digital communication technology allowed marketers to develop new and personalised ways of approaching and interacting with their customers. With more than 2 billion e-mail users and close to 1 billion mobile phone users in the world today, the attractiveness of building a marketing strategy that includes these media is evident. The tapping of the “permission potential” of these media can be valuable. They clearly deliver new opportunities in marketing communications.

However, using digital media in marketing also involves some risks. The main threat to the successful launching of digital marketing campaigns comes from the escalation of “spam”. An EU study has estimated that the global cost of unsolicited e-mail marketing for companies is more than US$8 billion per year. In Japan, the early levels of mobile spam represented more than 80% of the 1 billion mobile messages sent every day. The technical costs of mobile spam to Japan were estimated to be over US$8 per day. One of the main reasons for this is the pricing scheme for mobile services in Japan. Under the prevalent Japanese model, the end-user is the payer of incoming messages. There is thus little commercial incentive for unscrupulous marketers to refrain from sending unwanted commercial messages.

However, the business risks of creating unwanted messages in the mobile space may be as great as (if not greater than) the ones posed by strict anti-spam legislation. The sending of unwanted messages may have been a significant income generator for Japanese operators at the outset of the launch of their mobile services. They are now discovering that these initial gains may be short-lived. Mobile users tend to blame their operators for the spam that they receive and are likely to change operators if the level of unwanted communication becomes too great. This, of course, is the biggest threat to an operator’s business. At the time of writing, only 10% of most European operators’ revenue came from data communications, while the share of revenue coming from marketing data communications is still less than 1% of all revenues. Most operator revenue is still generated from voice services.

The amount of marketing money operators invest to attract customers is significant. A churn rate of just 1% in the global operator business could represent a loss of more than US$2 billion to operators. Operators therefore need to be vigilant in creating barriers to spam, given the risks involved. The implementation of the following practices should form 3the best protection against the derivative risks of spam.